Leaders tend to meet these days in an attempt to save the world economy but
when diplomats and bureaucrats convene for the UN Climate Change Conference in
Copenhagen in December it will be to tackle a problem on an altogether different
scale: save the world.
When they do, somewhere in the middle will be a group of accountants trying
to convince leaders that saving the planet means including climate change
information in the annual reports of big companies.
The first step was taken at the end of May when the Climate Disclosure
Standards Board set up by the World Economic Forum published its draft
framework for clarifying ‘precisely’ what information needs to be disclosed.
This was a big step. The framework runs to 72 closely-typed pages and
includes a neat example from PricewaterhouseCoopers for how this new kind of
reporting might look.
The framework is out for consultation until 25 September but has already
received endorsement from the profession.
Michael Izza, chief executive of the ICAEW and a representative at the World
Business Summit on Climate Change, also held in Copenhagen last month, says:
‘This is the domain of the accounting profession. The CDSB’s reporting
framework… is a great example of how the profession has and can continue to play
The great fear from companies will be that the whole thing will just mean
more reporting and more compliance. According to those who worked on the draft,
Lois Guthrie, technical director with the Carbon Disclosure Project, the
world’s largest compiler of corporate climate change data, says: ‘The CDSB is
about getting better reporting, not more reporting. The framework draws upon
relevant financial and business reporting principles as well as best practice
with regard to corporate climate change related disclosure in order to provide
organisations with greater clarity as to what to include in their annual
The PwC example for ‘Typico’ reports on climate change risks and
opportunities, including things like cost savings from energy efficiency, energy
efficient product sales and low emission product sales. The example also
illustrates a strategy for reducing green house emissions while showing how
sales might rise as emissions fall.
The key now is the December UN meeting in Copenhagen. The CDSB will be there
to present the framework at a fringe meeting but what the framework really
needs is full endorsement by the conference.
That might be difficult. The big purpose of Copenhagen is to get an
international agreement on green house emissions in place because measures
settled at Kyoto 12 years ago are due to expire in 2012.
Even the UN acknowledges that the process is prone to stalling because of
disagreements between countries. Add to that the fact that China is now the
biggest producer of green house gases, and yet wants to maintain its economic
growth, and you have a set of negotiations so distracting that it is difficult
to see how corporate reporting crop up on the main conference agenda.
That won’t stop the CDSB. As Paul Dickinson, chief executive of the Carbon
Disclosure Project, says: ‘There is no scarcity of warnings of the risk of
irreversible climate change to the environment. Against this background, it is
imperative that companies supply shareholders with appropriate climate change
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